Try plugging the phone cable into the other jack. The only time I have ever gotten that message is when I forgot to plug in the phone cable. Or maybe try another cable. If when you go to control panel modems, see that a standard modem is listed, click on diagnositcs, see that a standard modem is listed on com1, highlight com1 and click on more info, you should get:
Port Info Com1
UART: NS 16550AN
Highest speed 115k baud
This is the message I get on my machines. If you are getting this far but no dial tone, there may be a conflict somewhere. Go to Device Manager, delete modems, com1, com2, lp1, and the usb info. Shut down and reboot. Usually window will sort things out and reassign everything so that there is no conflict. You may need you cab files when windows reloads.